Alliance summary

On November 23, 1998, a research alliance was signed between Novartis Agricultural Discovery Institute (NADI, a subsidiary of Novartis) and the Regents of the University of California, Berkeley. NADI provides $25 million in research funding to those faculty in the Department of Plant and Microbial Biology (PMB, part of the College of Natural Resources) over five years. NADI also provides access to proprietary information, particularly a genetics database. One-third of the funds go to University overhead. In return, NADI gets first rights to negotiate licenses on a portion of patentable discoveries made in PMB, although UC generally retains the patent. NADI has influence, but not complete control, over the research done under the funding as well as oversight of implementation. They review publications and talks, and can prevent their release if they contain proprietary information, and can delay their release in order to file a patent.

Read the summary provided by University Relations.


28 of 30 PMB faculty signed on to the alliance. It went into effect Feb. 1, 1999, and the first progress report was filed March 2. However, this contract is only part of the alliance. Another $25 million for capital improvement from NADI to CNR was contingent upon passage of the research agreement. Furthermore, several contentious issues remain to be resolved, such as Novartis adjunct faculty, Novartis employees on campus, and the construction of a Novartis facility.


The full text of the agreement is available at University Public Relations, first floor of Sproul Hall.

The agreement is between NADI and the UC Regents.
"The ultimate goal of NADI is to achieve commercialization of products based upon technology developed under this agreement."
"Funding provided by NADI for this program is intended to qualify as a research credit in the context of . . . tax regulations."
"NADI wishes to establish a facility close to the campus of the University" (NADI-UCB) to house the genetic database, accessible to those who sign on to the agreement.
NADI employees may be appointed to University positions and will be allowed to work in PMB, and PMB scientists who have signed on can work at NADI-UCB.
Even graduate students must sign the agreement to access the database.
The research program is for 5 years, and can be extended by mutual consent.
Each year, NADI gives UC $5 million.
2/3 goes to the research program.
1/3 is for "the indirect costs of the University and PMB."
The alliance will be overseen by a Research Committee and an Advisory Committee.
The Research Committee selects which projects to fund from the proposals from the PMB faculty who have signed on.
It does not make recommendations for research projects.
The 5 member Research Committee is 3 PMB faculty (the Principal Investigator of the alliance (Willy Gruissem) and 2 others selected by the PMB faculty), the President/CEO of NADI, and the one of the two co-presidents of Novartis Agribusiness Biotech Research (another subsidiary).
The Research Committee formed and elected members in Sept. 1998, two months prior to the signing of the contract. The two other PMB faculty are Sydney Kustu and Brian Staskawicz.
NADI can fund separate, additional, specific projects with individual faculty.
Projects funded by this research agreement can't use funds or research materials from other private, for-profit sources.
The Advisory Committee is responsible for management and oversight of the NADI - University relationship.
The 6 member Advisory Committee is the Berkeley Vice Chancellor for Research, Berkeley Dean of CNR, a Berkeley professor from outside of CNR (selected by the other five members of the Advisory Committee), the President/CEO of NADI, and the two co-presidents of Novartis Agribusiness Biotech Research (another subsidiary). [Clearly, the body vested with oversight of negative impacts is strongly in favor of the alliance.]
Research covered by this agreement (with respect to research results, publication, and first rights to license) includes any research done during the five years by the PMB faculty and staff members who have signed on to the agreement.
This pool of research excludes work done by PMB faculty who did not sign, research funded by other private for-profit sponsors, and any research funded by a contract that would be violated by this agreement.
It explicitly includes research funded by government agencies such as the National Institutes of Health, National Science Foundation, US Dept. of Agriculture, and California Agricultural Experiment Station.
It does NOT call for these other funders who are covered by the agreement to be notified.
Thus, this agreement covers most research in PMB - not just that funded by the alliance.
Research results (as covered in the above description) are kept.
They will be presented at an annual scientific meeting, at a location to be announced. All travel expenses will be paid by the NADI funds.
The University owns the research results.
Although NADI acknowledges that the UC environment is open, UC must use reasonable efforts to maintain the secrecy of proprietary information.
But any results that contain NADI proprietary information can't be published or presented without the consent of NADI.
Proprietary information is anything written or said from one party to another that the first party says is proprietary. This can be done up to 30 days after the communication occurred.
The party providing the information can request to have it returned or destroyed.
NADI gets copies of the results, for free, and can transfer them to its affiliates (assuming Novartis proper).
NADI also has the rights to publish the results.
The University will acknowledge NADI support in publications, unless NADI requests otherwise.
Potential publication or disclosure to anyone not signed on the agreement of any research results (as described 2 sections back) must be approved by NADI 30 days prior.
This even includes simple graduate student talks.
If NADI believes their is patentable subject matter, publication can be delayed up to 90 days in order for NADI to request that the University file a patent. (A primer on patents)
Patents are generally held by UC.
In two cases, joint UC-NADI patents are filed:
Both University and NADI employees make the discovery without using University facilities
Only NADI make the discovery, but use University facilities
UC is responsible for notifying NADI of any patentable discovery made by anyone signed on to the agreement.
Although the University must file and prosecute patents, NADI selects the attorney and the drafting of the applications. UC can give permission to file foreign patents.
A license is permission from a patent holder for someone else to use (and usually market) the intellectual property. The licensee typically pays royalties to the patent holder.
For inventions using the genetics database, the University gives NADI an irrevocable, royalty free, nonexclusive license.
Each year, NADI gets to pick a portion of all the patentable discoveries made by research covered in the agreement (see a few sections back)
This portion is equal to the portion of funding for research covered by the agreement that is actually funded by NADI. This is now about 1/3.
NADI gets the first right to negotiate an exclusive, royalty bearing license to market the invention.
NADI must exercise this right within 180 days of the patent filing.
Terms will be negotiated "in good faith."
NADI can then sublicense to an affiliate (assuming Novartis).
Thus, research wholly funded by government (and tax payer) money can produce an invention marketing exclusively by a Swiss firm.
NADI can "roll-over" unused rights to negotiate licenses from the first two years to the third year.
University will give "special consideration" to licensing those inventions that NADI declined to small businesses.
Each party is held liable to the extent that it is negligent or intentional.

The alliance does not explicitly hold UC free from product liability.

Either party can terminate the agreement with one year's notice.

UC will use its best efforts to not enter into other conflicting contracts.

Disputes will be handled by arbitration.

"NADI may assign this agreement and any right thereunder to any successor . . . to an affiliate of NADI."

Changes to the contract can be made in writing.

"The University agrees that is an independent contractor."

"All faculty members who receive research contracts or grants or a gift from the Novartis corporation, its subsidiaries or affiliated organizations . . . will be requires to disclose any financial interest they may have in those firms."

Yet UC administers "intellectual property rights for the public benefit" and encourages "the broad utilization of the results of University research."